A project aimed at providing housing for 600 low-income families in the Limassol areas of Ayios Nikolaos and Ayios Ioannis is now hanging in the balance.
According to Phileleftheros, the government has informed the Limassol municipality that funds are missing to see the project completed, regardless of the fact that it reached its final stages.
The ambitious housing project includes the construction of 138 apartments. The Limassol municipality has already relocated nine families living to the complex. However, the report said the current occupied apartments are in makeshift conditions.
The governments reluctance to provide funding for the project, which has an estimated annual cost of €5 million, has cast doubt on the feasibility of the housing complex.
Furthermore, the municipality would be burdened with an additional tax of approximately €2 million for the first phase of the project, including capital gains tax and VAT. In addition to that, the project has is not-for-profit, as it was approved a social initiative by the local authority.
The housing project was approved in 2019 by the Limassol mayor Nicos Nicolaides and was introduced as a response to the severe housing crisis prevalent at that time.
In 2019, the Limassol municipal council approved Nicolaides proposal to utilise three pieces of municipal land in town, totalling 31,081 square meters and valued at over €20 million, for the construction of residential units for low-income families.
A year after, in July 2020, the Limassol municipality signed a preliminary agreement between and the Cyprus Land Development Corporation (KOAG), under the chairmanship of the then-government spokesman, Marios Pelekanos.
In December 2021, the project was extended to include the construction of a further 600 affordable housing units to address the high rents in Limassol. At the time, it was hailed as a historic agreement, as it represented the largest social housing project in Cyprus, involving direct or indirect participation from government authorities. However, at the moment, it remains uncertain when or if the project will come to fruition.
According to the agreement, the Limassol municipality would transfer the municipal land plots to KOAG in exchange for the gradual development of the affordable housing infrastructure financed by KOAG. Subsequently, the affordable housing units would be provided to eligible households through transparent processes and based on specific income criteria. The total cost of the entire project exceeds €100 million.
The collaboration between the municipality and KOAG takes the form of an exchange agreement, and the project will be constructed in three phases.
The first phase envisions the construction of six apartment buildings, with four on one of the two Ayios Nikolaos plots and two on part of the Ayios Ioannis plot. The successful completion of the project would alleviate the housing difficulties faced by vulnerable families in Limassol.
However, its future hinges on securing the necessary funding and government support, which, at the moment, appears as a remote possibility, since neither commercial banks nor the European Investment Bank, which could potentially provide part of the projects funding, have been able to secure state guarantees, as deemed necessary by the finance ministry.
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